It is gives me tremendous pleasure to stand before you this morning as Eskom is to table before the Nation the Power System Update.
We have consistently undertaken this exercise in order to be transparent about the state of the system and the challenges we are facing in that regard.
It is necessary to do so given that we have asked our people to partner with us in saving electricity in order to keep the lights on during this period of the constrained power system.
The provision of adequate and reliable electricity remains an essential element to support economic growth and the country’s developmental imperatives.
Until such time that Medupi and Kusile power stations become functional, concerted efforts must continue to be directed at ensuring that the operational performance at Eskom’s power stations is improved, that power plants are well maintained and that the necessary initiatives are put in place to ensure that electricity demand is met and that the power system integrity is maintained at all times.
As we stated it during our Medupi visit on 11 April 2013, we are going to closely monitor the progress of these Build Programmes and take all the necessary steps to ensure that they deliver as expected, tolerating no delays and penalising failure.
All our attention is now drawn towards realising Medupi’s first power.
At the same time, we continue, as we have done in the past and through extensive communication and campaigning, to ask the country to do their part in ensuring that the effort to keep the lights on is realised.
I am glad to highlight that with the assistance of customers, Eskom has up to now been able to ensure that lights are kept on despite the challenges experienced.
The power supply side experienced several challenges in the past few months which exacerbated the already constrained system.
The performance of the power stations deteriorated quite significantly particularly since the September rains.
Furthermore, due to Eskom shifting out some scheduled maintenance, most plants experienced higher rates of “unplanned outages” – that is, when power station units trip or produce at well under their expected capacity.
There have been a variety of causes but the root cause is that there still is not enough space to do the kind of maintenance which is required to make old plants more reliable.
Some of the key contributing challenges include:
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The reduction in capacity (from about 1500 Megawatts to 650 Megawatts) imported from Cahora Bassa due to a technical failure at the Songo substation in Mozambique and the subsequent failure of the transmission line due to floods in early January 2013 in Mozambique;
- The unplanned outage of one of the Koeberg units (capacity of 900 Megawatts), put added strain on the coal-fired power stations; and
- So too, are the prevailing poor coal quality (resulting in significant load losses) at some of the power stations, particularly Tutuka.
Despite the challenges the Medupi project faced in the recent past and is still facing, I remain resolute in the commitment to see the first power from the Medupi power station by the end of the calendar year which will assist in balancing the supply-demand imbalance.
This will require the cooperation of Eskom, its contractors, staff and labour to ensure that the target is not shifted.
I have further directed Eskom to ensure that they provide the country with regular updates on the progress with the Medupi build.
The improvement of Eskom’s maintenance practices is a step in the right direction and this will go a long way in ensuring reduction of the maintenance backlog eventually ensuring long-term reliable electricity supply.
The backlog has been reduced from 36 units in January 2012 to 23 as at end of March 2013.
Until the entire backlog is eliminated and maintenance is sustained at appropriate levels, the performance of power stations will remain a challenge.
To ensure that the progress made to date is sustained, the department will continue interacting with and monitoring Eskom’s progress in implementing measures to ensure reliable electricity supply on a weekly basis.
As in the past, the support of big business remains a key lever in ensuring uninterrupted electricity supply.
In that regard, the department will make sure that dialogue with customers, including big business, households and other key stakeholders, continues in order to ensure that everyone is kept abreast of the system performance and progress in addressing the challenges.
Whilst NERSA's decision on Eskom’s third multi-year price determination application (MYPD3) is welcomed, the implications of the lower tariff and revenue approved on Eskom’s operations and overall business sustainability are currently being investigated.
This decision is surely going to have far-reaching implications, likely to include a curtailment of some of the supply-side, demand-side and energy-efficiency measures currently in use.
It is clear that the NERSA decision changes the game significantly, which is why I have asked the Eskom Board, working with the department, to evaluate amongst other things, measures put in place to address the constrained system and current maintenance practices with a view to come up with much a more rigorous way to improve on maintenance and ensure power system integrity and system performance; the benefits of which will include improved plant reliability and ensure continuity of electricity supply.
All this is to be done within the approved price increase.
I expect this to be presented to me in next few weeks along with policy implications that would require Government to decide on.
In the meantime, as we are heading to winter which is anticipated to be extremely cold given the recent cold spells, I would like to stress the importance of using electricity sparingly and urge you to cooperate with us in this regard.
During the months of April 2013 until July 2013, the electricity system is going to be extremely tight, particularly when the winter peaks.
Ordinarily, the winter is characterised by high electricity demand, however, this winter is unique in that it will be the first time that Eskom has planned to execute a fixed level of long-duration maintenance - up to 120 days - due to the technical limits on the plants identified for maintenance and which must be implemented.
Eskom’s power stations are at a stage wherein plant reliability can no longer be compromised by delaying maintenance.
The undertaking of this planned maintenance will thus result in an even more delicate power system given the number of risks that could negatively affect Eskom’s ability to balance supply and demand this winter, thus a partnership in keeping the lights on will be even more required than at any other stage in the past.
There is a greater need to save more electricity especially over the evening peak periods, that is, between 5pm and 9pm, when the system will be the most constrained.
Just to put this into context, within this peak time, South Africa electricity demand rises by more than 3000 MW which is larger than all SADC countries combined.
Therefore, a significant behavioural change is required by everyone in the country.
As South Africans, we call on you to use electricity sparingly, particularly, during these peak times by switching off geysers, pool pumps and lights not in use during this time.
When boiling water, fill the kettle with the quantity required, use blankets to keep warm and try cooking early where possible as this will help in our efforts to implement actions to ensure the integrity of the power supply.
In conclusion, I would like to urge the country to continue supporting our efforts of keeping the lights on, especially as we go into winter which will be even more challenging.
I appeal to you all to pay attention to the daily power-alert messages broadcasted on TV to guide you in contributing to ensuring that electricity demand is met at all times.
No effort is insignificant in this regard, every little bit helps.
I thank you.
